The most shorted ASX shares tell investors which companies professional investors expect to suffer.

The latest short position reports from ASIC, covering the week to 1 September 2026, contain two names that have each had their respective issues.

One company is shorted because it is losing money.

The other is shorted because it made too much, too quickly.

The 10 most shorted ASX shares right now

DroneShield Ltd (ASX: DRO) sits at the top of the list with 15.37% of its register sold short.
Lotus Resources Ltd (ASX: LOT) follows at 15.04%, then 4DMedical Ltd (ASX: 4DX) at 12.37%.
Domino’s Pizza Enterprises Ltd (ASX: DMP) is at 11.98% and Treasury Wine Estates Ltd (ASX: TWE) at 11.74%.

The week-on-week movement is worth noting.

CAR Group Ltd (ASX: CAR) has dropped out of the top ten entirely, and Elders Ltd (ASX: ELD) has taken its place.

DroneShield’s short interest actually rose, from the 14.9% recorded a week earlier, despite the shares already having fallen sharply.

DroneShield: Shorted because it lost money

DroneShield has become the most shorted stock on the market for reasons that become clearer when investors look at the company’s annual accounts.

First-half revenue rose 74% to $125.8 million, which is a strong number.

Underneath it, gross margin fell from 65.3% to 60.0%, underlying EBITDA swung to a $12.4 million loss, and the statutory result was a $32.2 million loss, compared with a $2.1 million profit a year earlier.

The company also has an ASIC investigation running into share trading and disclosures from November 2025.

The counter-argument is that the balance sheet is untouched.

DroneShield holds $180 million of cash with no debt and has reaffirmed FY 2026 revenue guidance of $250 million to $270 million.

The shares are down about 74% from their high, which is a lot of scepticism already in the price.

PLS Group: Shorted because it made too much

PLS Group Ltd (ASX: PLS) is the opposite case entirely.

FY26 revenue rose 152% to $1.93 billion, underlying EBITDA reached $1.14 billion at a 59% margin, and the company swung from a $196 million loss to a $526 million profit.

The company resumed dividends with a fully-franked 5 cents per share.

Shares rocketed 30% in August alone and have roughly doubled over twelve months.

So why short it?

Because the result rests on a realised spodumene price of US$1,488 per tonne, more than double the prior year.

FY27 capital expenditure is guided at $620 million to $685 million, roughly double the prior year, which competes directly with the dividend just restored.

Lithium has always been a violently cyclical business, and bears are betting the cycle turns before the capital is spent.

Managing director Dale Henderson said of the results:

That financial strength gives us flexibility: we can continue investing in Pilgangoora, bring Ngungaju back into production, advance P2000 and Colina, and pay a fully franked final dividend of 5 cents per share.

Foolish takeaway

Short interest is a reading list, not a verdict.

Plenty of heavily shorted companies go on to perform perfectly well, and a crowded short position can unwind violently.

What I take from this particular table is that the most shorted ASX shares are not all the same bet.

For DroneShield, the question is profitability, and for PLS Group, it is the lithium price.

The post What are the most shorted ASX shares on the market right now? appeared first on The Motley Fool Australia.

More reading

• Top 3 ASX defence shares to buy right now
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Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, DroneShield, and Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has recommended CAR Group Ltd, Domino’s Pizza Enterprises, and Elders. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you have a high tolerance for risk and are seeking strong returns for your portfolio, then read on.

That’s because the team at Bell Potter believes the ASX stock in this article could rise over 85%.

Which ASX stock?

The stock that the broker is bullish on is Devex Resources Ltd (ASX: DEV).

It is a Perth-based uranium company focused on the Alligator Rivers Uranium Province (ARUP) on the north-western margin of the Northern Territory’s McArthur Basin. 

Bell Potter notes that the ASX stock has consolidated a district-scale land position with over 50km of highly prospective fault corridors which host existing uranium discoveries. 

The broker has been pleased with recent exploration progress and believes there’s more to come. It said:

One month in, the program has delivered encouraging results. At the KP Prospect (2km radon anomaly), DEV hit a 10m-wide fault breccia above the unconformity, geochemically similar to the geology overlying the likes of Jabiluka. Big Radon Prospect (3km radiometric and bedrock alteration anomaly) drilling has identified a 20m wide fault zone and down hole gamma reporting 1.6m at 680ppm eU3O8 in chlorite altered schist with further assays pending. 

At Sandfire, drilling will test for the position of the Angularli Fault Zone along strike from Deep Yellow’s 32.9Mlb U3O8 deposit. DEV continues to work-up prospects by relogging historic drill core and analysis of recently consolidated datasets. A recent airborne hyperspectral survey of DEV’s granted tenements will add further data granularity. The historic Caramal deposit (6.5Mlbs at 0.31% U3O8) provides an important geological analogue.

Big potential returns

According to the note, Bell Potter has put a speculative buy rating and 41 cents price target on the ASX stock.

Based on its current share price of 22 cents, this implies potential upside of just over 85% for investors over the next 12 months.

Commenting on its buy thesis, the broker said:

The key value catalysts for DEV include uranium market fundamentals, exploration results and M&A-led growth. We have a positive medium- to long-term outlook for the uranium market, supported by barriers to new supply and demand growth linked to electrification, energy security and AI-related power requirements. 

DEV has embarked on a systematic exploration program across a district-scale consolidated landholding in a historical but underexplored uranium province analogous to Canada’s Athabasca Basin, a region supplying around one quarter of the world’s uranium needs. We expect DEV to be disciplined in further consolidating uranium assets in support of its ambitious growth targets. At 30 June 2026, DEV had cash of $27m.

The post Guess which ASX stock could rise 85% appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Working out how many ANZ shares you need to generate $8,000 of annual passive income is an important exercise.

The bank currently yields 4.38% on a share price around $38.

That sounds modest.

Once franking credits are included the picture changes considerably, and so does the amount of capital required.

The maths behind $8,000 from ANZ shares

ANZ Group Holdings Ltd (ASX: ANZ) has paid 166 cents per share over the past twelve months.

That comprises an 83 cent final dividend franked at 70%, paid last December, and an 83 cent interim dividend franked at 75%, paid on 1 July.

Divide $8,000 by $1.66 and you need 4,820 shares.

At $37.93 each, that is an investment of roughly $182,800.

What franking credits change

The calculation looks quite different at tax time.

At 75% franking and a 30% company tax rate, each dollar of dividend carries about 32 cents of franking credit.

That lifts the grossed-up dividend to roughly $2.19 per share.

On that basis you need about 3,650 ANZ shares, or an investment near $138,300.

The franking credits have saved you more than $44,000 of capital.

Whether you actually receive that benefit depends on your marginal tax rate, and retirees in pension phase capture the most of it.

Can ANZ keep paying it?

This is the important question to ask for long-term investors.

The half-year result to 31 March delivered cash profit of $3.78 billion, up 14% on the prior half excluding significant items.

Cash return on tangible equity improved 161 basis points to 11.6%, and the cost-to-income ratio fell from 54.6% to 49.4%.

Common equity tier one capital was 12.39%.

On top of this, the August quarterly update was steady rather than spectacular.

Cash profit was $1.90 billion, up 1% on the first-half quarterly average.

Net interest margin edged up one basis point to 1.54%, and capital strengthened again to 12.51%.

The individual credit impairment charge was just $65 million, or three basis points annualised.

Chief executive Nuno Matos kept the message simple:

Our balance sheet and capital position remain strong, and we are staying close to our customers should they need support.

The risk with ANZ shares

Two risks deserve attention before investors commit $138,000 to a single bank.

The first is regulatory.

APRA raised ANZ’s capital add-on to $1 billion in April 2025 alongside a court enforceable undertaking over non-financial risk management, and that overlay has not been removed.

The bank also booked a NZ$125 million provision for a New Zealand class action in the third quarter.

The second is concentration.

Suncorp Bank integration is 57% complete and the single customer front-end is 45% complete, both on schedule, but integrations are where banks tend to find unpleasant surprises.

Foolish takeaway

ANZ shares can produce $8,000 a year, and the capital required is either $182,800 or $138,300 depending on whether franking credits count for you.

I would treat the grossed-up number as the realistic one for most Australian investors.

What I would not do is build the whole income stream from a single bank on a price-to-earnings ratio above 19.

Allocating the same capital across three or four payers yields a little less but removes a great deal of risk.

The post How many ANZ shares do you need for $8000 of passive income? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.